Comparative balance sheet accounts of Sheffield Inc. are presented below. SHEFFIELD INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $42,300 $33,700 Accounts Receivable 70,000 60,400 Inventory 30,300 24,100 Equity investments 22,000 38,700 Machinery 29,900 18,900 Buildings 67,000 56,100 Land 7,600 7,600 $269,100 $239,500 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation - Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings $2,200 5,600 13,300 35,000 3,400 21,000 150,000 38,600 $1,500 2,300 9,000 25,000 2,600 30,600 125,000 43,500 Common Stock, no-par Retained Earnings 150,000 38,600 $269,100 125,000 43,500 $239,500 Additional data (ignoring taxes): 1. 2. 3. Net income for the year was $41,300. Cash dividends declared and paid during the year were $21,200. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,200 were sold during the year for $28,900. No unrealized gains and losses were recorded on these investments in 2020. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. 4. 5. Sheffield's 2020 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,350 depreciation and $5,076 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $534,300 376,200 158,100 119,700 38,400 $3,700 (800) 2.900 $41,300 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) SHEFFIELD INC. Statement of Cash Flows For the Year Ended December 31, 2020 (Indirect Method) Cash Flows from Operating Activities Net Income $ 41,300 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense $ Loss on Sale of Machinery 800 Gain on Sale of Investments Increase in Accounts Receivable (Net) 9600 . . > >